Konstantin Malofeev’s Marshall Capital sold shares to
Rotenberg’s Bellared Holdings Ltd for an “undisclosed amount,”
the company said in the statement. The stake has a market value
of 38.7 billion rubles ($1.3 billion), according to Bloomberg
calculations.

Rotenberg, whose business includes road construction and
building pipelines for OAO Gazprom, has an estimated worth of $1
billion, according to Forbes Russia. The acquisition marks a
“long-term investment in the Russian telecommunications
market” for him, the company said. His representatives will be
nominated to the board of directors in June.

Rostelecom’s chief executive officer, Alexander Provotorov,
previously worked for Marshall Capital. Prime Minister Dmitry
Medvedev’s government had sought to replace Provotorov,
criticizing the company for spending on an expansion into the
mobile business.

“It doesn’t matter if Provotorov runs Rostelecom or
another professional manager picked by the government,”
Malofeev said in a Dec. 18 interview. “What is important to us
is the shares’ appreciation and Rostelecom’s expansion into
wireless business, which has proven to be the key growth driver
for fixed-line operators globally.”

Mobile Expansion

Rostelecom’s expansion into the mobile business may
threaten mobile phone operators including OAO Mobile
TeleSystems, OAO MegaFon and VimpelCom Ltd, whose profitability
could decline as a result, Malofeev said at the time.

“Rotenberg is more acceptable for Kremlin as a shareholder
as he is known to be very close to the president,” Alexander
Kazbegi, an analyst at Moscow-based Renaissance Capital, said in
a telephone interview.

Still, Rotenberg is new to telecommunications industry, and
it’s unclear if he will keep Marshall-backed Provotorov as the
company CEO, Kazbegi said.